Friday, February 17, 2017

Defending Yourself Against the "Trump Tug"

I'm not sure if my readers have noticed, but Donald Trump has a rather unique follow-through on his handshakes as shown here:

One could term this move the "Trump Tug".

Here's another example of an interesting Trump handshaking style with Japan's Prime Minister Abe Shinzo:

It's interesting to note that Abe Shinzo's hand position is definitely giving the appearance of a limp wrist and that he does get a small "Trump Tug" even while seated.  As well, the pats on the top of his hand by Donald Trump certainly make him appear to be dominated. 

Not all world leaders have fallen prey to the "Trump Tug".  As shown here, Canada's Prime Minister (and Nice Hair Guy) preempted the tug with his own move, a left hand on Trump's right shoulder as shown at the beginning of this video:

Of course, Trump's rather unusual handshaking style has been analyzed with some "experts" saying that it is a show of power or dominance over the person he is shaking hands with.

Now, thanks to the Relson Gracie Jiu-Jitsu Academy in Columbus, Ohio, we now have a defence for the "Trump Tug" as shown here:

Please note that the instructor does not advise that you use this move on the President of the United States since it is highly likely that the Secret Service may have something negative to say about it.  I'd say that's quite likely the case.

Thursday, February 16, 2017

Terrorists in the Homeland

A recent study by the Center for Immigration Studies supplied us with the terrorist conviction database which was compiled by the Senate Subcommittee on Immigration and National Interest, chaired by newly minted Attorney General Jeff Sessions.  In this database, we find a complete listing of terrorism-related convictions in the United States since 9/11 along with their immigration status (where available), the terrorist organization that they were affiliated with as well as the offence that they were charged with and the sentence imposed.

In total, between September 11th, 2001 and December 31st, 2014, there were 580 people convicted of terrorism-related charges in the United States.  Of those, 380 are foreign-born and 200 are American citizens (either natural-born or naturalized).

Of the seven nations selected by the Trump Administration for immigration bans, let's now look at the number of convicted terrorists that came from each nation in order from most convictions to least:
Somalia - 21
Iraq - 19
Yemen - 13
Syria - 7
Iran - 4
Sudan - 3
Libya - 2

Interestingly, here is a look at the number of terrorism-related convictions for eight other nations in the database:

Pakistan - 62
Lebanon - 38
Jordan 17
Egypt - 17
Saudi Arabia - 9
India - 9
Gaza - 7
West Bank - 6

Let's summarize all of the data with a graph noting that the nations on the Trump ban list are coloured light red and the nations that have been excluded are coloured in light blue:

In total, there have been 69 terrorists convicted from the seven nations on the Trump ban list compared to 165 from eight other nations that have been given a pass by the current administration.  If you look at the data, you'll notice that Pakistan, alone, is responsible for 26.4 percent of the convicted terrorists in the 15 nation list.  

Let's look at the data another way.  Of the 580 convicted terrorists in total, here is a graph showing the percentage of convicted terrorists from each of the 15 nations, again, with the seven excluded nations in light red:

Apparently, as the government's own data clearly shows us, terrorists from some nations are more acceptable/less terrorizing than terrorists from other nations who are considered "America's friends".

Let's close this with one more statistic.  Of the 580 terrorists convicted in the United States over the period between September 11th, 2001 and December 31st, 2014, 73 or 12.5 percent of the total were natural-born Americans.  Apparently, terrorists are bred in the homeland as well. 

Wednesday, February 15, 2017

How Much Could the Trump Wall Cost?

With the Trump wall coming up for discussion on a fairly regular basis and with Donald Trump's rather fluid estimates of the cost of the wall, a brief by Konstantin Kakaes in the MIT Technology Review breaks down the numbers for us.  For the purposes of the brief, the author assumes a wall length of 1000 miles with natural barriers such as mountains blocking cross-border traffic in some regions and the existing border fencing providing security for the remainder of the 1989 mile-long international border. 

First, here is a map showing the proposed route of the wall:

Here is map showing the existing portion of the border barrier system:

There is already 653 miles of existing fencing along the border which has cost $2.3 billion in construction costs since 2006 with the first fence being constructed back in 1990; some of this "wall" looks like these photos:

About half of the 653 miles of existing fencing is designed to stop vehicular traffic with most of the rest designed to stop foot traffic.  In total, there are  48 controlled U.S. - Mexico border crossings with 330 ports of entry.  As you can see from the photo above, much of the fence would provide very little impediment for an immigrant.

If a concrete wall were to be built as Donald Trump has suggested, it would be constructed using concrete reinforced with steel rebar; the author suggests that a wall between 35 and 65 feet in height would be required, recommending an average height of 50 feet with a foundation that extends 15 feet underground for both stability and to deter cross-border tunnelling with a one foot thickness to reduce the risk of boring through the wall.  To put this into perspective, the relatively short sections of existing concrete wall that separates Israel from Palestine is up to 26 feet in height and looks like this:

A wall of the dimensions proposed by the author would use 12.7 million cubic metres of structural concrete (average cost $900 per cubic metre) and 2.3 billion kilograms of rebar (average cost $2 per kilogram).  In addition, there would be labor costs for construction which are likely to be high given the ruggedness and remoteness of some of the terrain, however, for the sake of this estimation, the author uses the same labor costs as what went into building the border fences between 2006 and 2009 as noted above.

Here is a cost summary for 1000 miles of concrete wall:

Concrete - $8.73 billion
Rebar - $4.6 billion
Labor - $2.3 billion

TOTAL - $15.63 billion

According to the author, the total cost of megascale projects in the United States is generally two to three times the material costs.  In this case, the material costs total $13.33 billion; this results in total costs ranging between $26.7 billion and $39.9 billion.  And, as we know, governments rarely spend less than projected on major construction projects.  It is also important to remember that much of the existing barrier is an easily breached fence meaning that well more than 1000 miles may be required to ensure security.

In this era of a $20 trillion debt, America's taxpayers will have to decide whether the added security is worth the cost. 

Tuesday, February 14, 2017

Russia Low-Tech Stealth Weapon - Hiding in Plain Sight

Recent news about a new development in Russia's military will, at the very least, keep America's Department of Defense guessing.  This low-tech option will make it increasingly difficult for the United States to use a pre-emptive strike against Russia's nuclear weaponry one of the aims of the Conventional Prompt Global Strike (CPGS) program which is designed to allow the United States to deliver a missile to any target on earth within an hour.

As reported by Sputnik/RIA, Russia has developed a rail-based based missile system, Barguzin or BZHRK, which has successfully passed testing.  The missile ejection/pop-up tests took place in November 2016 at the Plesetsk Cosmodrome and were considered successful, setting the way for additional flight testing.  While there is nothing particularly new about the missiles used, the means of transporting them around Russia has now reached a new milestone.  In the past, the rail cars used to transport Soviet-era missiles were of different dimensions than normal rail cars, making them an easier target for American/NATO anti-missile activities.  In its newest iteration, the rail cars used are indistinguishable from normal rail refrigeration car and can be used on standard gauge surface rail lines, making it a "nightmare for enemy (i.e. NATO/American) intelligence.  Please note that this is a replacement for the Cold War era Barguzin system that was abandoned in 2005.

Here is a video showing how the system works:

The system can carry up to six RS-24 Yars ICBMs and uses a new combat control system which has protected digital communications channels as well as a new launching platform.  The RS-24 missile is relatively new, entering service in 2010.  It is 20.9 metres long, has a weight of 49 tonnes and can carry between 6 and 10 MIRVS (i.e independently controlled warheads), each with a yield of between 100 and 300 kilotons.  It has a range of 12000 kilometres and a circular error probable or CEP (i.e. accuracy) of between 150 and 200 metres.  It takes approximately 7 minutes for a three man crew to launch the RS-24.  Here is a video showing the road-mobile version of the missile on parade through Red Square and a launch of the RS-24:


In the next stage of testing, additional missiles will be launched from their new rail-based transports and it is expected that the entire system will be operational by 2018 and is expected to remain in service until 2040.  The trains will be able to travel up to 1000 kilometres in a 24 hour period and can launch its missiles when either stationary or moving.  Given Russia's massive rail infrastructure and the fact that it has the largest geographic area of any nation on earth, a missile-bearing train could pretty much hide in plain sight, rendering the American Conventional Prompt Global Strike program pretty much impotent.

Monday, February 13, 2017

The Federal Reserve's Reluctance to Learn from the Bank of Japan

I recently posted an article on the minutes from the Federal Open Market Committee meeting held on November 1 and 2, 2011, focusing on who was to blame for the intransigence of the American labor market (hint - it was the drug-abusing, lazy unemployed that were to blame).  Digging further through the 282 page release, there was more interesting information, particularly the Fed's concerns that the U.S. economy may be retracing the steps that the Japanese economy has experienced over the past two decades despite the central bankers' best efforts.

Let's look at some background information to start.  Here is a graphic showing the timeline for Japan's experiment with Quantitative Easing between 2001 and 2013 as well as the growth in the monetary base and consumer price index:

In general, quantitative easing entails the purchase of assets (i.e. government bonds) by a central bank which is financed by money creation.  Effectively, the government is printing money rather than raising taxes or cutting expenditures to pay its debt; as a result, QE is considered to be inflationary.  With Japan's ultra-low inflation rate, QE was expected to raise inflation/eliminate deflationary pressures, however, as the above graphic shows you, that has clearly not happened.

Here is an updated graphic showing the Bank of Japan's balance sheet from Yardeni Research with the QE periods shaded in blue:

As of February 2, 2017, the Bank of Japan held a total of 481.98 trillion yen ($4.31 trillion US) on its balance sheet as shown here:

This is what has happened to the yield on 10-year Government of Japan bonds since 1989:

This is what has happened to Japan's GDP growth on a year-over-year basis since 1995:

Over the past twenty-one years, Japan's GDP has grown at a very modest average of 0.32 percent per year.

From this background, we can see that the Bank of Japan's mammoth sixteen year effort to kick-start the Japanese economy with a succession of monetary experiments has been less than a resounding success with low inflation and low economic growth all while punishing savers with ultra-low interest rates on their investments.  

Now, let's look at some excerpts from the FOMC minutes.  

1.) President Charles Evans - Federal Reserve Bank of Chicago:  After advising that the Federal Reserve revert to a "business as usual" monetary policy model by removing excess monetary accommodation, he notes that the United States could end up with a "liquidity trap" scenario where injections of cash into a low interest rate system by a central bank fail to decrease interest rates because consumers choose to avoid bonds and keep their funds in short-term savings with the belief that interest rates will soon rise.  Here are his quotes:

"The second story line I referred to as the “liquidity trap” scenario. In this scenario, short- term risk-free rates are zero. Actual real rates are modestly negative, but the real natural rate of interest is strikingly negative. This is due to an abundance of risk aversion, extreme patience, and deleveraging, and these attitudes are unlikely to disappear any time soon. In this scenario, we’re in the aftermath of an enormous Reinhart–Rogoff financial crisis, and the resulting drags on demand are exceedingly large and persistent. The clear and present danger here is that we repeat the experiences of the U.S. in the 1930s or Japan over the past 20 years...

According to the logic of the liquidity trap theory, we risk being mired for an unacceptably long period in recession-like circumstances unless we are willing to voluntarily embrace and commit to a higher inflation rate than our medium-term objective, at least for a time. It is against central bankers’ DNA to discuss and acknowledge this, but we should not risk an outcome like the U.S. in the 1930s or Japan today. Three percent just isn’t such a big number that we should resist it the way the 1930s Fed adhered to the gold standard." (my bold)

2.) President James Bullard - Federal Reserve Bank of St. Louis:  Here are his comments on changing the Federal Reserve's inflation target, whether a higher inflation target is warranted and whether the Fed could retain its credibility if it changed its target: 

"As you all know, I remain concerned that we are not putting enough weight on the possibility that committing to near zero rates for a very long time will simply produce zero rates for decades. The memo contemplates very long times at a policy rate of zero. It really begins to sound like we would be creating the worst outcome of all and the importing of the Japanese situation to the U.S. We should be thinking about the tradeoff between possibly creating a replication of the Japanese situation in the U.S. versus the relatively minor and uncertain benefits of promising longer and longer times at a policy rate of zero in the hopes that that would raise inflation expectations today...

If that policy rule is going to tell you that you’ll never move off zero until certain conditions are met, then the public starts to think, okay, you’re never going to meet those conditions, so you’re going to stay at zero. One of the conditions is that inflation is near target, but because of the Fisher relation, inflation expectations are low, and so you’re just permanently below the target. That’s what happened in Japan, where they’ve had mild deflation for 15 years." (my bold)

3.) President John Williams - Federal Reserve Bank of San Francisco:

"Finally, Governor Raskin and I are just back from a trip to both China and Japan, but I’ll comment on what we heard in Japan that made me especially drawn to the Tealbook “Lost Decade” alternative simulation. In fact, many of the people we talked to in Japan predicted that the U.S. would soon, or within a few years, be talking about a lost decade for the U.S. In this scenario, “persistently sluggish growth . . . has a corrosive effect on the supply side of the economy.” Governor Raskin and I encountered people, as I said, who warned that these risks were developing for the U.S. And based on their own agonizing experience, they stressed the difficulties of pulling an economy out of a protracted slump. The large downward revisions to U.S. potential that I mentioned earlier reinforce such concerns." (my bold)

4.) President Charles Evans - Federal Reserve Bank of Chicago:  Here is a comment that he made during his regional update:

"To sum up, all of the incoming data and anecdotal reports point to an economy that’s just sputtering along. We’re generating growth, but it falls far short of the pace we need given the size of the resource gaps that must be closed. With regard to the two scenarios I discussed this morning, in my opinion, the U.S. economy is entangled in a liquidity trap with amplification from a large Reinhart–Rogoff financial crisis. We could be staring at a lost decade, the way President Williams was suggesting from his comments on Japan. Even if this is only an exaggerated risk—I don’t think it is—if we fail to take further actions, owing to credibility risks, we end up with about as much credibility as the Bank of Japan has, I worry. Like President Rosengren, I worry about too slow, incremental policies. I think we need to continue to add more accommodation." (my bold)

My suspicion is that, when the Bank of Japan announced its first foray into quantitative easing back in March 2001, it had no idea that sixteen years later, it would still be undertaking monetary policies to reflate its moribund economy and that more than a decade and a half of monetary policy experimentation would have proved so ineffective at achieving more than modest improvements.  For obvious reasons, the Federal Reserve should be very concerned that it is retracing the steps of the failed Japanese monetary experiment, concerns that were quite evident in the minutes of the FOMC meeting held in November 2011.  Despite those clearly expressed concerns, the Fed went on to implement QE 3 in September 2012, hoisting the its own balance sheet to its current level of just over $4.2 trillion.